Why Chasing an SME IPO Might Cost You More Than You Think
Mukul Goyal
Co-Founder, Stratefix - Helping Indian SMEs execute their business strategies | Top LinkedIn Voice | Business Strategist | Six Sigma Certified | Podcaster
In this week’s edition of highlights from Bharat ke SMEs podcast, I wanted to share this game-changing conversation with Rohan Mehta , CEO of Turtle Wealth Management Pvt. Ltd., on a topic that looms large in the minds of many small and medium business owners—should MSMEs pursue an SME IPO, or is it just a pipe dream?
With India leading the global IPO bandwagon in 2024, there are Millions of Indians who are still waiting in the wings to join the equity bandwagon! Rohan Mehta’s bold statement, couldn’t be more relevant.
"Try to catch two rabbits, and you will catch none!"
Many SMEs are torn between the allure of listing on the SME IPO to raise capital and the reality of what it takes to grow a business sustainably.
In this deep-dive podcast, Rohan breaks down SME IPOs Vs Mainline IPOs vs Private Equity; why SMEs should think twice before jumping into the IPO bandwagon and how chasing multiple goals simultaneously can dilute focus—and ultimately, success.
SME IPOs vs Mainline IPOs are two distinct avenues through which companies can raise capital by offering shares to the public.
While both serve the purpose of raising funds, they differ in various aspects such as listing requirements, regulatory framework, costs, and market reach.
Mainline IPOs differ from SME IPOs in terms of listing requirements, regulatory framework, costs, and market reach.
Mainline IPOs have stricter listing requirements, higher regulatory scrutiny, and greater market reach compared to SME IPOs.
The SME IPO Illusion: Is It Really Worth It?
For many SMEs, an IPO or Initial Public Offering represents the ultimate achievement, a milestone that brings visibility, status, and the promise of capital to fuel growth.
But as Rohan Mehta, with 17 years of experience in wealth management, explains, this aspiration might be more of a distraction than a genuine growth strategy.
According to him, SME founders often get too wrapped up in managing stock prices instead of focusing on business fundamentals.
Here’s why SME IPOs might not be as lucrative as they seem:
SME IPO vs Private Equity: A Better Path for SMEs?
Instead of an IPO, Rohan suggests private equity funding as a smarter alternative. Why? Because private equity:
The central question, as Rohan emphasizes, is this: Are SME founders clear on their WHY before considering an IPO?
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I couldn't agree more on this point since without clarity, SMEs may fall into the trap of pursuing visibility over viability.
Key Takeaways from "All I Want to Know Is Where I'm Going to Die"
Rohan Mehta references a thought-provoking book: "All I Want to Know Is Where I'm Going to Die So I'll Never Go There," which explores the philosophy of investing legends Warren Buffett and Charlie Munger.
The book is a study in simplicity and common sense, two traits that SMEs need more than ever when considering an IPO.
Key lessons from the book that apply to MSMEs:
Their approach, like Rohan’s advice, is simple: Don’t take unnecessary risks. Focus on what works, and avoid what doesn’t.
In a way, this sums up the conversation—don’t get blinded by the allure of an IPO if it doesn’t align with your company’s growth strategy.
Questions Every SME Founder Should Ask Before Considering an IPO:
So, should you chase the IPO dream? Or should you focus on building a sustainable, profitable business with the help of private equity?
The answer depends on your business goals, but one thing is clear: Don’t spread yourself too thin.
Are You Catching the Right Rabbit?
This week’s podcast highlight is a must-listen for every SME founder who has ever dreamed of listing in an SME IPO.
Are you chasing two rabbits and risking catching none? Or are you focused on the right growth strategies for your business?
?? Catch the full conversation with Rohan Mehta on the latest episode of Bharat ke SMEs and learn why you need to think twice before jumping into an SME IPO. Listen Now!
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2 个月Very informative nd well explained bull's eye thank u for guidance
Strategic Business Partner | Management Consultant, Operation Planning & Execution Specialist | Passionately Driving Growth, Efficiency, Profitability & Success for SME's since 8 years ??
2 个月Great insights Mukul Goyal, business owners should carefully assess their operational strengths and weaknesses, strategic goals, market positioning and growth potential before deciding on the type of IPO that best suits their needs.
Top LinkedIn Voice | Co-Founder & Management Consultant | Your Strategic Partner Driving Sales Success & Business Growth: Empowering Businesses with Effective & Practical Solutions for 11+ Years!
2 个月The podcast reminded me that success is not always measured by how quickly you reach your goals. Sometimes taking the time to build a solid foundation and grow organically can lead to long-term stability and success. Stay focused on your vision and trust the process, the journey is just as important as the destination. #slowandsteady #success #mindset